Computing - Server
The Taiwanese Server Industry in 1H 2002 and Beyond
September 02, 2002 / Peter Lin
9 Page, Statistics Report

Abstract

The global economic downturn and conservative corporate IT spending has resulted in lackluster performance of the global server market. However, the Taiwanese server industry's cost-down and high quality products continue to be well regarded by major international vendors, aiding Taiwanese manufacturers in maintaining a certain level of shipment volume. In the second quarter of 2002, shipment volume exhibited slight year-on-year growth; shipment value, on the other hand, has declined slightly due to the falling price of components. Despite year-on-year shipment growth, the HPQ merger had a significant ripple effect throughout the Taiwanese server industry, impacting not just shipment volume, but also altering share of shipment destinations and OEM/ODM production. This report will provide an examination of the Taiwanese server industry in the first half of 2002, as well as present a quarterly forecast for the remainder of 2002. 
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In order to strengthen its position in the high-end market, Intel is expected increase its collaboration with Taiwanese server manufacturers. The technical support provided by Intel will help Taiwanese server manufacturers to move into high-end server production. If Taiwanese companies can take full advantage of this opportunity it will be easier to secure orders from major international vendors in the future, enabling the Taiwanese companies to increase their profits.

Following the merger between HP and Compaq, the volume of orders now being placed by HPQ is smaller than before. The question of whether other major international server vendors, such as Dell and IBM, will outsource more of their production in the face of increasingly fierce price competition remains to be seen.  Either way it will have a major impact on the Taiwanese server industry's shipment volume. 

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